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You have probably heard the term blockchain, but do you really know how it works and the benefits of using it? First of all, it’s important to describe it. Blockchain is a database distributed in several computers at the same time. Every block has its own information and it is connected with the previous one. Therefore, every time a new block is added, the chain grows.
As simple as it may look, blockchain technology is a really effective way to transfer information from one place to another in an automated and safe way. Here is an example to understand how it works: person A initiates a transaction to send something to person B and consequently creates a block. Next, this block is verified by thousands of computers around the network. When the block has been verified, it is added to the chain while creating a unique record that is attached to the blockchain history. Then, this process happens again, and the chain grows.
Blockchain has been a massive success mainly because of its three biggest advantages. These are the following: using a decentralized system, the safety it provides to the users and the transparency there is with the transactions made.
The safety and immutability that it provides is the biggest innovation of this technology. In order to modify a block in the chain, the hackers would need to modify all the previous blocks in the network. And although this is not impossible, it’s highly unlikely to do it since it would require too much computer power and energy. The distributed network also guarantees that the information will always be available because every nod in the network stores an exact copy of the whole chain.
Working with a decentralized system is another advantage of blockchain technology. Every nod in the network has access to all the information in the system and therefore there’s not a single computer or entity that regulates the information. This also means that every nod can validate the new blockchain registers without an intermediary that controls everything.
A system that provides transparency to its users is really important and that’s why having the transactions of the blockchain available for every person is a huge advantage of this technology. However, you can remain anonymous since all you can see is a register of every transaction made between the users. In other words, blockchain registers are permanent, chronologically ordered, and are available to all other nodes.
Because of its great success, this technology is already being used by many companies in order to improve their services. The crypto world has embraced this technology with brands such as Bitcoin, being the pioneer, Ethereum, with the smart contracts implementation, and Traxalt, with the scalability structure, being the firsts to implement this system with very good results. However, it’s expected that more and more businesses outside of the crypto world will start to use it in the near future.
What are some of the industries that could benefit the most from implementing blockchain technology? Probably the most important one would be voting. The use of blockchain in elections could prevent fraud since people would have access to a verifiable database where no votes are changed or added. Education, cloud storage, and health care are other industries where blockchain is having a big impact.